Once wedded to EU, some British farmers think it's time to cut loose

LONDON (Reuters) - After decades of generous subsidies from Brussels, some British farmers are starting to think the unthinkable -- that they might be better off outside the European Union.

Dairy cattle graze in a field in Perthshire, Scotland, in this file photograph dated August 11, 2015. REUTERS/Russell Cheyne/files

Farmers were strong supporters of EU membership when Britons last voted on it in 1975, and for years they flourished as funds flowed into the sector to encourage ever-rising production.

The 3 billion pounds a year that they receive in support payments from the EU makes up about 55 percent of total income from farming, according to government figures.

But now, with Prime Minister David Cameron preparing to call an “in or out” referendum on Britain’s EU membership possibly as early as June, some farmers feel the benefits of belonging to the Brussels club are far less compelling than a generation ago.

They wonder if a “Brexit” vote might free them to innovate in areas like genetically modified crops, and rid them of oppressive regulation.

“We are being hammered as a source of employment for inspectors,” said Charlie Flindt, a farmer from Hampshire in the south of England. Even simple jobs, like putting up a fence to protect walkers who had complained of being mobbed by his cattle, involved painful bureaucracy, he added.

“You can’t simply put in a fence any more, and the hoops we have to jump through to get our European Union subsidies just pile up year after year. And most of us went into this job to get away from paperwork.”

Flindt, who has an arable farm in Hampshire along with a few sheep and cattle, said he couldn’t believe a British-based system, outside the EU, would be “as Kafkaesque as it is at the moment.”

INFLUENTIAL LOBBY

While full-time farmers are relatively few in number -- only 140,000 in 2014, according to government figures -- they wield considerable influence in rural communities which, come election time, vote overwhelmingly for Cameron’s governing Conservatives.

Not all are swayed by the argument that leaving the EU would make life easier. Some worry that subsidies could be cut and they might lose access to important European markets if Britain breaks with Brussels and its Common Agricultural Policy (CAP).

France was the largest beneficiary of EU farm payments in 2014 with 8.5 billion euros ($9.3 billion), with Britain in sixth place after Spain, Germany, Italy and Poland.

”In the past, all the main political parties have said they want to phase out subsidies by 2020. I think it is more likely if a system of subsidy is going to be maintained, it will be less than we get now with the CAP,” said National Farmers Union economist Lucia Zitti.

She told Reuters the union’s members are “quite split. They want to understand more about the implications of a possible Brexit and also hear how the EU can work better for farmers.”

Matt Naylor, who grows flowers such as daffodils to sell to supermarkets in Britain and mainland Europe, said he would vote in favour of staying in the EU because he relies heavily on foreign labour.

Naylor said workers from countries such as Poland, Lithuania or Latvia had often grown up on farms and had a different work ethic and set of expectations from their British counterparts, who were often three or four generations removed from the land.

“There are a lot of people who are prepared to sit on a tractor. But when it comes to shearing a sheep, attaching things to dairy cows, things like that, it is harder to get (local) people,” he said from his farm in Lincolnshire, eastern England.

“MUSEUM OF WORLD FARMING”

A cow stands after being milked on a dairy farm in Macclesfield, Britain, in this file photograph dated August 11, 2015. REUTERS/Andrew Yates/files

The in-or-out debate featured prominently last week at the annual Oxford Farming Conference, where a former government minister argued that the EU was shackling British innovation.

“British agriculture, brimming with potential, is held back by prejudice against advanced technology and science,” said former farming and environment minister Owen Paterson.

“The obstinate refusal to adopt advanced technology means Europe has become the museum of world farming.”

The EU’s reluctance to embrace genetically modified crops has added to the frustration of some farmers. Britain’s government has been more supportive of GMO crops than many other EU nations in recent years.

Critics argue that the EU stifles innovation through what they see as an overly cautious and lengthy approval process for new crop protection chemicals.

And while the EU’s farm budget is declining after reforms to the CAP, pressure from environmental groups has led to increased regulation on issues such as pesticides and waste disposal.

Farmers have also been asked to grow a wider variety of crops in order to continue to receive yearly support payments.

“The money has become far more difficult to access and regulation has drastically increased,” said Stuart Agnew, a farmer from Norfolk in eastern England and the agriculture spokesman for the anti-EU U.K. Independence Party.

Many arable farmers in his region who traditionally rotate between wheat and rapeseed now have to add crops such as peas or beans, or leave land fallow under rules designed to provide environmental benefits.

“Peas and beans have always been the Cinderella crops of British arable farming. Nobody really likes them. Beans are not really profitable and peas really mess the combine up,” Agnew said.

MARKET ACCESS

The outlook for UK farming outside the EU could hinge on what access is granted to key export markets and the extent to which Britain is prepared to maintain support payments.

Britain’s exports of wheat, for example, are dominated by EU destinations, with Spain and the Netherlands the most important customers in recent years.

“Trade is the key issue and no one can say what the arrangements would be following a Brexit,” said Sean Rickard, a former chief economist with the National Farmers Union.

“The ‘Outs’ claim the UK will be able to negotiate a preferential trade agreement. But they provide no details, and any negotiated agreement cannot give the UK the same benefits as being a member of the EU. To do so would undermine the EU.”

Rickard, now an independent economist, said it was likely that substantial tariff barriers would spring up, prompting food companies to consider shifting their operations to Ireland or other parts of the EU.

Economists said Britain would still have to comply with EU standards if it wanted to export to the bloc, but would no longer have a voice in shaping the rules.

“If you are going to leave because you want to make your own rules on pesticides, or have nutrition traffic lights on your food labels and so on, that is going to increase costs for those of your industries that are export-orientated because they are going to have to continue to meet EU standards,” said Alan Matthews, Professor Emeritus for European Agricultural Policy at Trinity College, Dublin.